[drbb6]

Dear Tax experts

I am an H1B visa holder working in USA from Nov 2009 in Texas. I was in USA in 2009 from March to August 2009 on a B1 Visa. My wife and 2 children stayed with me from Nov 2009 to Jan 2010. They went back to India on 22nd Jan 2010. When they were here I applied for a ITN for them but IRS rejected it saying no tax return is attached. Now I have to file my tax return. Can anyone please help me suggesting
What form should I use
Shall I file married filing jointly or separately
Do I have to send W7 once again with the tax return
Can I claim my children as dependents


Thank you

[AtlantaTaxExpert]

You can file jointly with your wife and you both CHOOSE to be treated as resident aliens. This will allow you to claim the $11,400 joint standard deduction plus two $3,650 personal exemption (for yourself and your wife), plus a $3,650 for each child PLUS the $1,000 Child Tax Credit.

To apply for an ITIN, you need to complete Form W-7 for your wife and children. You need to make a photocopy of their passports, then get the photocopy notarized. This can be done at your local bank in most states in the U.S.

This can also be done at a Indian notary, but if she will be coming to the U.S. within the next few months, you should get it done in the U.S. at any local bank, because, if done in India, she must also get a certificate of authenticity (called an apostille) from the Indian government. Depending on WHERE she lives, this can take from a few days to up to a YEAR.

The downside is that you must declare ALL 2009 world-wide income (wife's home country income, if applicable). There is an offset available by either claiming the Foreign Tax Credit (Form 1116) or to claim the Foreign Earned Income Exclusion (Form 2555).

Even with the downside, this is probably the best way for you to file.